Subsidies keep Texas cotton farmers growing

Scott Tong Aug 17, 2012

Subsidies keep Texas cotton farmers growing

Scott Tong Aug 17, 2012

Jeff Horwich: With this year’s drought, many U.S. farmers will fall back on a safety net: federal subsidies. But these government payments are highly controversial; they’re expensive. And Congress is taking a harder look at them than it has in years.

From the Marketplace Sustainability desk, Scott Tong reports from the cotton fields of Lubbock, Texas.

Scott Tong: Dry and 106 is no big deal to cotton farmer Brad Heffington. No rain all summer — that’s a different story.

Brad Heffington: Got about an inch of rain in planting time and haven’t had any since.

This is about the worst Heffington’s ever seen. 

Heffington: Cotton’s a desert plant. So it can handle, oh, some pretty hot and dry conditions. But not this dry.

What saves Heffington in bad years is federal subsidies. He’s received $2 million worth the last 16 years. But subsidies are breaking the federal bank. And the World Trade Organization’s ruled they unfairly prop up U.S. farmers. So Congress is poised to kill them.

Heffington: You take the subsidies way, and the farmer doesn’t have any profitability and anything, they’re not gonna do it. Then you’re not gonna have crops grown, you’re not going to have stuff for the consumer to buy, and then we’ll be at the mercy of importing all that stuff.

That argument worked for decades in Washington. The farmer was unassailable, says Georgetown economist Pietra Rivoli.

Pietra Rivoli: The idea of agriculture as a critical and noble endeavor, that idea has never left Washington. And a lot of these programs are just versions of what were put in place as a rescue measure in the Great Depression.

The farm bill moving through Congress would end a program paying farmers directly, based on their land. Terry Townsend represents a forum called the International Cotton Advisory Council.

Terry Townsend: It costs too much, and it just seems like welfare. You’re giving farmers money for not doing anything.

Another subsidy kicks in when commodity prices fall; that’s likely doomed too. The upshot of all this: weaker farms that haven’t kept up with new technology may fail.

Townsend: Just how many of those later adopters do you want to try to save? Back in Texas, farmer Brad Heffington plans to survive.

Heffington: I’m just like any other business, I’m going to have to adapt and figure out how to make it work.

I’m Scott Tong for Marketplace.

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